FNCE20001: Business Finance

2 assignments with 15 MCQs each (7.5% each), 1 MST(25%), 2 hour examination(60%)

After doing finance 1 during semester two last year with my friends, I'm the only one that decided to continue with business finance. I'm glad I made the right choice!

Lectures
The lecture slides are really good. They contain enough information for you to understand the concepts. All of the lecture slides are uploaded on LMS at the start of the semester so you can have a good idea of what you are going to learn. Sometimes the lecturer has a French? accent when speaking but what he says can still be really well understood. The content was not too hard until the final three weeks where I found taxes, capital structures and derivative securities more difficult than the rest.

Tutorials
Tutorials are not compulsory. The tutors do not mark your attendance. However, I really encourage you to attend all the tutorials even if you are able to do all the tute questions as the tutors will give their explanation for most of the questions. Maybe there is a better way of doing a question or wording your explanation. You do not need to complete the tutorial questions before the tutes but I did except for the final two weeks. I encourage you to complete the questions first and not just waiting for the tutors to spoonfeed you answers. It really helped with my understanding and you will know what questions to ask the tutor if you have any problems. There is no marks for participation but you should try to answer when the tutor asks something. My tutorial was very quiet. Only the same few people answer my tutor's questions.

Assignments
These are free marks! Everyone should aim for full marks here. You get 1-2 weeks to do the questions then you have one hour to submit online where you just click your preworked answers. Of course you can just do it together with your friends but I think it is better to do it on your own first before discussing and checking answers.

MST
2 past MSTs (2014 sem 2 and 2015 sem 2) and 3 practice MSTs were provided. I did not have time to do all of them so I did some and had a look at the rest. Answers and explanations were also provided. If you have any more questions, you can ask the online tutor. The MST tested on the first 9 lectures and I got full marks on it. I'm surprised the average was only 11.18/15 as I expected the cohort average to be higher than 12/15.

Exam
After getting full marks on the assignments and MST, I was aiming for mid 90s. Unfortunately the exam was a lot harder than the assignments and the MST. I think the exam was still reasonable except for a few questions which I had no idea how to do and they were probably harder than the stuff we learned. You also get 2014 sem 2 exam and 1 more sample exam to have an idea of the difficulty of the paper. Try to get full marks for multiple choice. This semester we had 15 MCQs which made up 30% of the exam mark.


This subject made me want to do more finance breadths but sadly the lv3 finance subjects need BusFi and QM2/Intro Econometrics as prerequisites and I probably won't be doing it as I did not enjoy my 1st year stats subject. I definitely recommend this subject as a elective/ breadth! Feel free to ask me questions if I did not include something you want to know.

Yes, with screen capture

Vincent Gregoire

2014 semester 2 exam and one sample exam

5 Out of 5

not needed.

2x 1 hour lecture and 1x 1 hour tutorial every week

2016, Semester 1

H1(89)

A midsemester exam (20%), end of semester exam (80%)

Summary: Business Finance was a

not recorded. lecture slides are quite jam packed and he tends to read off them but his elaborations on ideas and storys and examples etc. are CRUCIAL if you are not already familiar with the ideas very very well. ie; go to lectures

The legend himself professor Rob Brown

Please think twice before doing this subject and read this review. If you didn't like finance 1, you will HATE this subject so just turn around and walk away right now. just stop. alot of people want the high flying finance jobs but dont really have a passion for the content and they get screwed over big time. the other big warning is

Heaps of them.
They are a pretty good guide of the exam. the subject has gotten more theoretical and less maths-applicationy over the years, with WAY more proofs these days. the answer keys for the past exams were riddled with grammatical errors and shit lmao for some questions, B would be the correct answer, but the answer key would accidentally refer to it as answer A lol it gave me a headache and i stopped using them

5/5 if you like finance. 1/5 if you dont (although why would you continue on with finance if you didnt like finance 1 )
this subject is finance 1 2.0 it should just be called finance 2

dunno lol read the handbook i didnt buy the textbook. lecture slides are really really well detailed, and the lectures are comprehensive. when in doubt investopedia is your friend.

i did it in summer so, 2 x 1 hour lectures & 2 x 2 hour lectures + 2 x 1.5 hour tutes per

Summer, 2016

TBA

2 multiple choice assignments (7.5% each); midsemester exam (25%) and a two hour final exam (60%)

Personally, I did not like this subject. I’m sure that many others do, but I found the content to be boring, not overly challenging (at least compared to some maths subjects I’ve taken – though this is a bonus for some!) and felt that the style content was presented in left something to be desired. It did, however, serve as a good introduction to investments and corporate finance, and covered quite a bit of content in these two areas.

The subject is split into two halves; the first 6 weeks focuses on investments, while the second half of semester looks at corporate finance.
For the investments side of things, you start off with some basic financial maths (types of interest, debt vs equity, etc) and then spend a few weeks discussing some theories/models for pricing assets and portfolios. The two covered in more depth in this section would be modern portfolio theory and CAPM, but you do look quickly at some others like the principle of no arbitrage. If you come from a maths/hard science background then you would most likely find this to be very straightforward. The concepts are definitely far easier than first year maths/chem/physics/etc. On the other hand, if you haven’t really done any finance before a lot of it may seem to be quite new and different and it may take a little while to get used to.
These lectures would typically involve stating some formulas/theories and then doing a few practice problems. There wasn’t that much in the way of really deriving (or proving) anything, although it is an introduction so I guess that’s somewhat to be expected. I quite disliked this approach and prefer the more rigorous approach of the actuarial stream of financial mathematics but that’s just a personal thing. I’m probably more in the minority for that haha. Aside from that (which persisted through the whole course, not just investments), I didn’t have any issues with either of the lectures, not that they can really be blamed for the structure of the course. Actually that’s not quite true – they didn’t record lectures, which isn’t nice when some of us live a long way from uni. Thankfully the slides were detailed and you didn’t have to attend a lecture if you were willing to sit down and go through the slides afterwards. You get all the formulas on a formula sheet for both the midsem and final.

The corporate finance section is a lot more theory based, and in general you analyse broadly a firms financial policies - investment decisions, capital structure, whether or not dividends are paid, etc.
You start off this by looking at a few methods for comparing projects – with the big two probably being NPV and internal rate of return. These four or so lectures are more mathematical, along the lines of the first 6 weeks. The remaining portion of corporate finance is much more theoretical, and you deal a lot with Modigliani/Miller analysis when looking at capital structure and dividend policy. Finally, the last week covers some derivatives. So you look at futures/forwards and options and how you can use them for hedging.

I didn’t go to tutorials as I didn’t find them necessary. My tutor was actually very good though and explained things well, gave some background information, etc. But still you went along to watch someone go through problems for an hour. In my opinion, you’re better off doing them by yourself. The solutions were uploaded so you could check the answers if you had trouble, or you could attend a pit-stop tutorial if need be. Although I feel obliged to note that I don’t normally attend tutorials – I only go to tutorials for maths (because you get to write on the whiteboards! And you actually work with a small group of friends) and the compulsory commerce ones.

For assessment, there were some multiple choice assignments and it wasn’t uncommon for students to get full marks or close to it on both of these (they were only worth 15% in total).
The mid semester exam was probably a shock to most people, I think the average was something like 14/20, although considering it was multi-choice I’m not sure if that should be considered bad or good haha (I think midsems are generally easier than finals? That may just be me though). The hardest thing about it would definitely have been the theory, especially when you get those multiple choice questions that are so very close but have slight differences and you have to discern which of them is correct, or perhaps if more than one/none are correct. To do very well in this, you actually have to know all the content very well, rather than just being able to “do the maths”. Unfortunately, one or two of the questions were drawn from something that was quite obscure, as in just a passing note in a lecture. If you know the content well though, it was certainly quite doable.
The final also had a large portion of theory on it, probably something like 50/50. I think ours had a bit more maths than previous semesters though. Again, you need to know the content very well - know why the theories work and what they rely on, etc. The exam focuses on the second half of semester more; the first quarter or so was drawn from the first six weeks and was all multiple choice - similar to the midsem - while the rest of the exam was more of an extended response, where you had to analyse some projects (more maths) or apply theories (expect to write quite a bit). We were told that only the second six weeks of the course would be in the extended response, but believe it or not, the first extended response question came from the first 6 weeks. So make sure you revise the whole course!

Of all the second year units I have taken, I would definitely have to say that I found business finance was the easiest (potentially aside from organisational behaviour which can be a bit of a mixed bag ). Having taken a couple of semesters of financial maths and being quite mathematically minded I found it quite straightforward and boring. Going back a long way now, I think the maths problems are generally easier than maths methods ones if that helps. In general, if you’re good at maths and have a good memory then it shouldn’t be very hard to get a H1, provided you’re willing to do all the tutorial questions, memorise all the lectures, etc. I think our semester there were 5% of people that got above 85, but in first semester there were 10%. That said, a lot of students take the course (800 ish in 2014 sem2).
If you struggle with maths, then it will probably take a bit of effort to get a H1, but if you are diligent in doing the tutorial problems, redoing lecture examples, and ensuring you understand the content well, then it is certainly doable. If you took the accounting/maths pathway instead of finance 1 then it may appear a bit confronting at first, though it should come together quite quickly and the accounting subject may help you make more sense of the second half of the semester. Some of my friends found busfi to be quite hard, so perhaps it’s best to just take my advice with a grain of salt, or maybe they decided not to memorise all the theory aspects in the course, which certainly would hurt a bit.
I’m probably a little bit harsh on the subject, I'm a bit biased towards maths and economics I'd say. Overall the subject probably covered too much content to be able to go into the depth that I would’ve liked. It is however, an introduction to finance, so I guess it serves its purpose in that regard and you get into some more complicated stuff in third year and beyond. As a closing note let me stress that you should be prepared to explain things, and not just “do the maths”, even in the investments side – eg give the assumptions of a particular formula, or how a parameter is estimated in practice. If you want to do well you need to know all the content well.

No. It was available during semester 1, however. Slides are very detailed so lectures aren’t *necessary* for a good mark for a capable student.

Sturla Fjesme (first half) and Vincent Gregoire (second)

No, although there was 2 (or maybe 3?) sample exams provided. This is consistent throughout both semesters, and summer, as far as I’m aware.

3 of 5

The prescribed textbook is Business Finance (G Peirson, R Brown, S Easton, P Howard and S Pinder), McGraw-Hill, (11th edn), 2012. I’ve been told that this is also that textbook used for corporate finance in third year, so if you intend on completing that as well it may be worth picking up a copy. I bought a copy of it for busfi and barely used it.

2 one hour lectures and a one hour tutorial per week

2014, semester 2

H1